Harrison Street has raised a total of more than $2.5 billion for its latest U.S. opportunistic real estate fund. The firm closed its eighth fund, Harrison Street Real Estate Partners VIII L.P., at its hard cap of $2 billion.
Harrison Street surpassed the fund’s target of $1.5 billion and also raised an additional $510 million in co-investment vehicles to invest alongside Fund VIII.
According to the firm, the $2.5 billion of equity raised translates to more than $8 billion in total buying capacity. Returning investors made up 75 percent of this fund’s investors, while also attracting new institutional investors from around the world, according to Harrison Street.
Christopher Merrill, co-founder of Harrison Street, said in prepared remarks that Fund VIII’s closing was the largest closed-end fund in the firm’s history. The fund’s equity will be used for a wide range of project types including student housing, senior housing, healthcare delivery, medical office, life sciences, storage real estate, digital realty and build-to-rent single family housing projects. The fund’s asset mix is approximately 50 percent in senior housing, medical office and life science properties, 25 percent in student housing and 25 percent in other assets like data centers and build-to-rent segments.
So far, the fund has committed 53 percent of the total equity raised across 76 assets across 28 metros in the U.S. and in partnership with 29 best in-class operators. The fund’s acquisitions include Acoya Shea, a 147-unit senior living community in Scottsdale, Ariz., a data center in Virginia, a medical office in Mesquite, Texas and two life science properties in San Diego.
HARRISON STREET’S LARGEST FUND SO FAR
For Fund VIII, Harrison Street expects to commit the fund entirely in approximately 24 months. The close of the firm’s eighth fund also comes more than two years after the close of its predecessor.
Harrison Street closed its previous fund, Fund VII, at $1.3 billion and raised an additional $302.5 million in co-investment vehicles, totaling $1.6 billion raised. The fund closed in August 2019 with approximately $4 billion in buying power. The firm is also expecting to have more than 50 percent of the final Fund VII portfolio be senior housing, health-care delivery and life sciences assets.
Prior to Fund VII, Harrison Street raised nearly $1.2 billion for its sixth fund in the series. The Fund VI closed at $950 million and the company raised an additional $205 million of additional equity in co-investment vehicles.
In June, a joint venture between Harrison Street and Stellar Senior Living acquired a 232-unit senior housing community in Tucson, Ariz.